The primary sponsor of a controversial Senate healthcare bill fulfilled Wednesday her pledge to pull language that would affect the state’s certificate-of-need laws.

Sen. Joyce Krawiec, R-Forsyth, agreed June 20 to have the CON language removed via amendment when Senate Bill 361 reached the Senate floor.

Krawiec’s action was enough for the Senate to clear the bill by a 48-0 vote and send it to the House.

Krawiec said the CON language “will be addressed in a separate bill.”

There are three other CON-related bills: Senate Bill 646, which would provide services exemptions from some CON regulations; Senate Bill 539, which would repeal CON laws; and House Bill 857, which creates an exemption from CON laws for ambulatory surgical facilities.

None of those three bills has been heard in committee.

A certificate of need is required before a healthcare system or provider can build a facility, buy equipment, or offer a surgical procedure, among other things.

There are 28 health-care scenarios affected by the law, which took effect in 1978.

The primary goal is to prevent unnecessary duplication of services within a community or region as a means of controlling costs.

The initial version of SB361, introduced March 26, would have repealed the CON law, an effort that has been rebuffed by the House in previous legislative sessions.

A less-aggressive attempt that would have taken steps to reform the CON laws, rather than an outright repeal, was submitted June 12. That version cleared the Senate Health Care and Finance committees.

Those changes to SB361 would have made it easier to open ambulatory surgical, diagnostic and kidney-dialysis centers, chemical-dependency treatment facilities, intermediate care for those with intellectual disabilities, and psychiatric hospitals. The changes would also have made it easier for continuing-care retirement communities to open home-health agencies.

Krawiec told the Rules and Operations committee that part of the decision to pull the CON language was to allow other elements of SB361 to move forward.

Language creating the CON exemptions was included in the Senate’s state budget proposal, but removed from the state budget compromise released Tuesday.

Reducing the effectiveness of the CON law “is just a difficult bill for House members to embrace, so not sure it gets much traction,” said Rep. Donny Lambeth, R-Forsyth. Lambeth is a leading House health-care expert and a key House budget writer.

Sen. Paul Lowe, D-Forsyth, said he believed Krawiec and other Republican bill sponsors “saw the opposition to the CON changes, particularly in how it could have affected rural hospitals already hurting by the lack of Medicaid expansion.”

Other SB361 elements

The other key elements to SB361 are:

  • Having North Carolina join a national psychology licensure compact;
  • Allowing licensed marriage and family therapists to conduct initial examinations for involuntary commitments;
  • Making certain elderly-care regulatory changes; and
  • Eliminating redundancy in adult-care home inspections.

The first version of SB361 included increasing the number of intellectual/developmental disabilities (I/DD) Medicaid innovation waiver slots by up to 1,000 at a cost of $41 million over two years. Services include personal care and in-home assistance.

However, that language has been removed in the latest version.

The state budget compromise has the same increase in number of slots, but at a $22 million price tag.

Opposing arguments

The inherent limitations in the CON program have helped fortify the revenue streams of not-for-profit health-care systems, such as Cone Health, Novant Health and Wake Forest Baptist Medical Center.

“It’s time for us to change how restrictive North Carolina CON laws are,” Krawiec said as she introduced SB361.

People in favor of repealing CON laws claim that adding competition, particularly from for-profit groups, would lead to the opening of a host of new services and facilities, including more acute-care hospitals, diagnostic centers and rehabilitation centers.

They say competition would force more providers to lower fees for high-risk procedures. Several cost-comparison websites have shown the costs of some of those procedures can vary by tens of thousands of dollars within a region.

CON supporters say ending the law would allow for-profit groups to cherry-pick the most profitable medical procedures, leaving not-for-profit hospitals to handle in their emergency departments more of the sickest of the sick, who often don’t have health insurance.

The N.C. Healthcare Association opposes repealing CON laws, saying they would cost thousands of health-care jobs statewide, including in rural communities. “At a time of significant change in health care in our state, we believe now is not the time to discuss changes to the law,” spokeswoman Julie Henry said.

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rcraver@wsjournal.com 336-727-7376 @rcraverWSJ

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